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Migration is often a political hot potato but benefits abound for sending and receiving countries alike. Besides which, what denotes a sending and a receiving country is no longer simple, in reality countries are usually both. The UK for example has the world’s 8th largest emigrant population but also its 6th largest immigrant population.
Data on emigration are hard to come by, but World Bank statistics show that in 2010 there were 216 million migrants living outside the borders of their countries of birth. This is equivalent to 3.1% of the global population, or put another way, more than the entire population of Brazil. In the same year remittance inflows reached US$452,173 million and have since risen to US$547,003 million (in 2013): a consumer market greater than that of Indonesia.
Source: World Bank
Source: World Bank
Remittances and foreign direct investment in the home country are often cited as the strongest advantages of migration. Inflows of both can support current accounts – witness India’s remarkable improvement in its current account deficit, in part due to inflows of capital from its diaspora. For emerging markets, this is a timely concern.
The Philippines, with the world’s 9th largest stock of emigrants, can also count migration behind some of its success. Real GDP growth in the Philippines is expected to come in at 6.5% in 2014 – and this rate is expected to be maintained in the medium term in part due to strong remittances.
Remittances form a large proportion of some countries GDP, and are higher than exports in some countries – this makes them absolutely critical to economic performance. In Tajikistan for instance, remittance inflows were three and a half times the value of exports in 2013 and accounted for 48% of GDP in that same year.
Marketing to diaspora communities is necessarily challenging. Yet diaspora communities are not always as dispersed as might be expected. For instance 62% of migrants from the Philippines are living in just three countries: the USA, Saudi Arabia and Canada; and (less surprisingly) 98% of Mexican migrants reside in the USA.
Clearly income levels and spending priorities will differ significantly from country to country. Migration is not solely about movements from low or middle income countries to high income ones (South-North), but also from one high-income country to another (North–North); from a high-income to a low- or middle-income country (North–South); and from one low or middle-income country to another (South-South).
According to the World Migration Report 2013, from the International Organization for Migration, migrants originating in the South (whether going North or South) continue to face more financial difficulty than the native-born even after 5 years in the destination country. The same report finds that 31% to 35% of South-North migrants are in the lowest quintile of the income distribution (vs. 18% of native-born).
Migrant communities can offer distinct markets for travel and tourism back to the sending country, health and childcare services and nostalgic demand for products and services. A sense of belonging can be the most elusive need of these consumers.
They can also invest in their home countries and take back technical know-how and other skills and access to social and professional networks. Their remittances boost spending power in their countries of origin.
Post-recession, these diverse migration corridors are seemingly in flux with movements closely tied to economic realities on the ground. Countries traditionally seen as sending countries are now receiving countries in their own right, and vice versa. With global population growth slowing, and the labour force having peaked in some countries, increasing competition globally for skilled labour, is likely to make migration an ever more crucial issue.